According to the Zhitong Finance APP, Huachuang Securities released a research report stating that the transportation dividend assets in April 2025 will outperform the CSI 300 Index. The firm expressed optimism about the long-term allocation value of transportation, noting that the dividend yield is attractive after the correction, and emphasized the industrial logic that may drive valuation elasticity. 1. Ports: Long-term value may boost valuation elasticity. 2. Highways: The firm expects a rebound in the main business performance of highways, focusing on the optimization direction of toll road policies and proactive actions by local state-owned assets. 3. Railways: Long-term + reform dividends.

The main points of Huachuang Securities are as follows:

Monthly Market Performance

In April 2025, all segments of transportation dividend assets outperformed the CSI 300 Index. 1) Industry fluctuations: From April 1 to April 18, 2025, the transportation industry fell by 0.1%, outperforming the CSI 300 Index by 2.85 percentage points, with highway, railway transportation, and port cumulative fluctuations of -0.61%, +5.09%, and -2.82%, respectively, all outperforming the CSI 300 Index.

1. Interest rate environment: Still at a low level. In April 2025, the overall yield on government bonds showed a downward trend. As of April 18, 2025, the yield on 10-year China government bonds was 1.65%, down 16 basis points from 1.81% on March 31, 2025, while the yield on 30-year China government bonds was 1.90%.

2. Industry transaction volume: The transaction volume of all segments in April rebounded, with a significant increase in the average daily transaction volume of ports. From April 1 to April 18, 2025, the average daily transaction volume of highways was 2.91 billion yuan, up 29.8% year-on-year; the average daily transaction volume of railways was 2.41 billion yuan, up 14.28% year-on-year; and the average daily transaction volume of ports was 5.23 billion yuan, up 224.7% year-on-year.

3. Industry valuation: Compared to banks, coal, electric equipment, and public utilities, from the historical percentile of PE, railways are the highest among the main dividend asset sub-sectors, while public utilities are the lowest; from the historical percentile of PB, highways are the highest among the main dividend asset sub-sectors, while electric equipment are the lowest; from the overall industry dividend yield, highways, railways, and ports are all in the 3%-4% range, with coal and banks leading.

4. Capital operations: Anhui Expressway raised 522 million Hong Kong dollars through a private placement to Anhui Transportation Control.

Industry Data

The firm expects a good growth in highway toll revenue in Q1, and the port throughput data in the past two weeks has not been affected by tariffs. 1) Highways: Passenger volume, from January to February 2025, the cumulative passenger volume on highways was 1.862 billion trips, down 0.2% year-on-year; freight volume, from January to February 2025, the cumulative freight volume on highways reached 5.765 billion tons, up 5.7% year-on-year.

1. Railways: Passenger dispatch volume, in March 2025, the railway passenger dispatch volume was 337 million trips, up 4.9% year-on-year, down 8.6% month-on-month. From January to March 2025, the cumulative railway passenger dispatch volume was 1.074 billion trips, up 5.9% year-on-year; total freight dispatch volume, in March 2025, the total railway freight dispatch volume was 445 million tons, up 2.4% year-on-year, up 15.7% month-on-month. From January to March 2025, the cumulative railway freight dispatch volume was 1.253 billion tons, up 1% year-on-year
2. Ports: The Ministry of Transport closely monitors the weekly throughput of key ports. In the past four weeks, the cargo throughput of monitored ports reached 1.048 billion tons, a year-on-year increase of 4.5%. From the beginning of the year to date, the cumulative throughput is 3.883 billion tons, a year-on-year increase of 3.8%. In the past four weeks, container throughput was 24.77 million TEUs, a year-on-year increase of 6.7%. From the beginning of the year to date, the cumulative container throughput is 95.617 million TEUs, a year-on-year increase of 9.6%. The growth rate of key port cargo throughput shows that in February 2025, containers (+10.4%) > iron ore (-4.7%) > coal (-6.7%) > crude oil (-7.5%). In January-February 2025, containers (+8.8%) > iron ore (+2.7%) > crude oil (-6.9%) > coal (-10.0%).

2024 Annual Report Focus

1. Highways: Top five performance growth rates: Sichuan Chengyu (+22.91%) > Ninghu Expressway (+12.09%) > Gansu Guangdong Expressway (+8.65%) > Zhongyuan Expressway (+6.27%) > Anhui Expressway (+0.55%); Top five cash dividend ratios: Guangdong Expressway A (70%) > Shandong Expressway (63.76%) > Sichuan Chengyu (60.79%) > Anhui Expressway (60.02%) > Shenzhen Expressway (54.08%); Corresponding dividend yield rankings as of 04/18: Sichuan Chengyu (5.12%) > Shandong Expressway (4.05%) > Zhongyuan Expressway (3.97%) > Guangdong Expressway A (3.74%) > Gansu Guangdong Expressway (3.48%).

2. Ports: Top five performance growth rates: China Merchants Port (+26.44%) > Shanghai International Port Group (+13.26%) > Qingdao Port (+6.33%) > Ningbo Port (+4.91%) > Tangshan Port (+2.8%); Corresponding dividend yield rankings as of 04/18: Tangshan Port (4.72%) > China Merchants Port (3.83%) > Qingdao Port (3.55%) > Ningbo Port (2.98%) > Rizhao Port (2.77%).

Risk Warning: Economic downturn, reforms falling short of expectations, and capital operations such as mergers and acquisitions not meeting expectations